P.S.: In my next-to-last post, the numbers quoted from the Fed's financial statements are in thousands of dollars. Thus, for example, "871,255" is actually approximately $ 871,255,000.00.
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Alternative banking systems? (76 posts)
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Posted 15 years ago #
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Lots of links in this thread about "Money as Debt": http://uniteddiversity.com/money-as-debt/
Posted 15 years ago # -
Thanks for posting that link, chrisc. I notice the following comment on the above page:
Jojo Jul 12
The underlying assumption of the video is incorrect. The bank doesn’t create 9 times it’s deposits out of thin air. It lends up to 90% of the deposits that it has. There’s a subtle difference. If I have $1000 in deposits from people in my bank, I can loan out $900 of those deposits, holding $100. I cannot magically create $9000 out of thin air to loan to people and then say that I have $1000 in reserves. The reserve limit is against deposits not against outstanding loans. I cannot believe that a video based on such an incorrect understanding of economics was created.
Not having seen Money As Debt, I don't know whether the above is an accurate criticism of that video in particular, but the error discussed above is indeed a major part of the populist monetary folklore I've come across in other sources -- and it is indeed an error. See any economics 101 textbook.
There is indeed a monetary multiplier effect, but it works via a chain of loans and deposits, as follows:
Assuming a reserve ratio of 10%: Customer 1 deposits $1000 in bank A. Then bank A keeps $100 of that $1000 in reserve and lends $900 to customer 2. Customer 2, in turn, deposits the $900 in Bank B, which in turn lends $910 to Customer 3, keeping $90 in reserve. Cusomer 3, in turn, deposits the $910 in Bank C, which keeps $91 in reserve, lending out $819. And so on. All those bank deposits, which are considered money in their own right, add up to a maximum total of $10,000, or 10 times the original $1000.
That's how the banks create money. They do create money, but it is incorrect to say that they create money "out of thin air."
Deposits should not be confused with reserves.
Posted 15 years ago # -
Assuming a reserve ratio of 10%: Customer 1 deposits $1000 in bank A. Then bank A keeps $100 of that $1000 in reserve and lends $900 to customer 2. Customer 2, in turn, deposits the $900 in Bank B, which in turn lends $910 to Customer 3, keeping $90 in reserve.
That should be $810 -- this Javascript fractional reserve calculator, liked to from the uniteddiversity.com thread, is good at illustrating how this works:
Posted 15 years ago # -
Thanks for the correction. Making some further mathematical and typographical corrections, I should have written:
Assuming a reserve ratio of 10%: Customer 1 deposits $1000 in bank A. Then bank A keeps $100 of that $1000 in reserve and lends $900 to customer 2. Customer 2, in turn, deposits the $900 in Bank B, which in turn lends $910 to Customer 3, keeping $90 in reserve. Customer 3, in turn, deposits the $810 in Bank C, which keeps $81 in reserve, lending out $729. And so on. All those bank deposits, which are considered money in their own right, add up to a maximum total of $10,000, or 10 times the original $1000.
Thanks also for posting the link to the fractional reserve calculator.
Posted 15 years ago # -
The producer of Money as Debt has a page about the film, which ends with a link to Carol Brouillet's site:
Producer’s Comments on the Movie, Money as Debt
It is my intention to make this mysterious debt-money system comprehensible to everyone. It is also my intention to foster sufficient understanding of the problems with this money system that citizens will be motivated to join the monetary reform movement and/or create local alternatives to the global monetary system http://www.communitycurrency.org/resources.html - a system in which most of the productive people of the world are collectively chained to an ever-increasing and perpetually unpayable debt.
This is a system designed for elite control of the people by those who have given themselves the privilege of creating money. It is also, I believe, a system that is designed for catastrophe. As the movie explains, there can be no sustainable civilization without a sustainable money system
Posted 15 years ago # -
This is an excellent thread. Thanks Diane and Chris for posting all this stuff. I don't have time now, but I am going to check out all these links and respond later. Let me just say a few things quickly.
Diane, I was absolutely not saying that the profits go into the pockets of the member banks. But these smaller, member banks are different from the 12 large "Reserve Banks" (the real FED, so to speak). Similarly, the multiplier effect you describe applies only to the member banks, not to the Reserve Banks. And it applies only to lending based on customer deposits. The member banks also take loans directly from the Reserve Banks. Where does this new money come from? I think it can appropriately be said to be "created out of thin air." This is how the FED increases the money supply, by creating new money in the form of loans to the member banks (who they in turn lend it to consumers, who then deposit it in other banks, who then lend a portion of it again, etc). Thus there are two processes going on: the initial creation of new money and the further multiplication of this money as it gets transferred between various banks in the forms of deposits.
Emanuel
Posted 15 years ago # -
The 12 FED Reserve Banks: http://www.federalreserve.gov/OTHERFRB.HTM
Posted 15 years ago # -
emanuel wrote:
Diane, I was absolutely not saying that the profits go into the pockets of the member banks. But these smaller, member banks are different from the 12 large "Reserve Banks" (the real FED, so to speak). Similarly, the multiplier effect you describe applies only to the member banks, not to the Reserve Banks. And it applies only to lending based on customer deposits. The member banks also take loans directly from the Reserve Banks. Where does this new money come from? I think it can appropriately be said to be "created out of thin air."
That is correct. Only the Fed has the privilege of creating money "out of thin air." The private member banks create money via the multiplier effect, but that's not the same thing as what the Fed does. Alas, I've run into quite a bit of populist monetary folklore which confuses these two things, so it's important to be clear about the distinction.
Also, I think that any of us who did not take any economics courses in college should obtain an economics 101 textbook and slog through it. Of course, your average economics 101 textbook will be biased in favor of the present system. However, I think it's important for us to understand the present system and its rationales in order to critique it intelligently.
Posted 15 years ago # -
Ok, so I did some research to learn more details on exactly how the FED creates new money in order to increase the money supply. This is fascinating. Here is how it works:
First, fractional reserve banking rules require that the FED maintain a certain percentage of their loans in actual physical currency, like cash or government securities. In other words, they are allowed to loan their member banks money based on the amount of physical reserves they have. Another way of saying this is that the amount of money their member banks are allowed to loan out to you and I is based on how much physical currency the FED has in reserve, meaning inside the vaults of their 12 "Reserve Banks." So the question becomes, "how does the FED increase its reserves."
The FED increases its reserves (the actual hard currency stored in their vaults), by "purchasing" government securities. (I put the word "purchasing" in quotes for a reason, which I will get to in a moment.) Since the FED's reserves are now larger, they can loan more money to the member banks, who in turn loan money to individuals, businesses, other banks, etc. The multiplier effect then kicks in, which creates new money, because say I take out a $10,000 loan to buy a car. The car dealership takes my check and deposits it into another bank. That bank then increases it's own reserves by $10,000, and is then allowed to loan out about $9,000 to someone else (see Diane's post above for the exact fractional amounts).
But the multiplier effect is not the only way the money supply increases, because when the FED purchases government securities, it does so with a FED check, which is a totally new form of money. In other words, when the FED writes a check, new money is created. And yes, this means out of thin air. But keep reading, because things get even more interesting.
Government securities (like Treasury Bills) are paper promissory notes the government sells on the open market to raise money, which they then promise to pay back at a fixed time later, with a bit of interest. The government issues securities (various bonds, T-bills, etc.) in order to raise money, which increases the national debt, because these notes must be paid back when called upon (so long as it is past the maturation date issued on the note).
So when the FED wants to increase it's reserves, it purchases government securities with FED checks (new money remember), but it doesn't purchase newly issued securities directly from the government. It purchases them from the open market, from individuals and private institutions who have already bought them and who want to sell. These sellers then deposit the FED check into their local bank, and the multiplier effect again takes over. So the money supply increases even more.
And note that as the fed accumulates more and more government securities, the US government owes more and more money to the FED. But check this out. The FED doesn't need government money, because they are the ones who have the the power to print money anytime they want! And indeed, the FED has never sold a government security, ever. In its entire history, it has never decreased the money supply by selling it's government securities and reducing its reserves. For 90+ years it has been buying up US government securities!
This reminds of of something Anthony Sutton said. He told his father once (who was a member of Skull and Bones), that he was worried about how large the national debt was growing, and his father laughed and said, "Don't worry son. We are loaning it to ourselves." Of course, by "ourselves" he means the rich and powerful who control both the FED and the government. He doesn't mean a government representing the people. By indebting the US government to itself, any time it wants the FED could call in its paper securities. But why would it do this? Certainly not when the economy is growing, because during a period of growth it can just keep playing the same game, issuing more money so banks can make more loans and collect interest. But when the economy stops growing, when nobody is taking out more loans, the game ends, and we are left with a situation where the US government now owes a shit load of money to the FED, and the only way the government can pay back this money now is by taxing the people.
No wonder the powers that be (including wall street and the banking cartel) are supporting Obama now, and the media is saying more taxation is good. In the past, they didn't want the government to raise money by taxes. They wanted the government to issue securities and increase its debt. But now that peak oil has arrived and the game is up, they are going to create more taxes, and transfer as much of the remaining money to them, in the form of bailouts, and by calling in their treasury bills.
This world is absolutely crazy!
Emanuel
PS - Here is the wikipedia entry on government securities. http://en.wikipedia.org/wiki/Treasury_security
Posted 15 years ago # -
haven't had time to read everything in this thread yet and no time now, but looks fascinating, will be back.
I just came across this recently, still researching, but it's a fact is was tried in Wurgi, Austria and some neighboring towns in 1933-34, with great success; ban the charging of interest (usury), and charge a tax on money hoarded- not on property, wealth or capital. The result was that the velocity (circulation) of money increased by 14 times, full employment, long term investing, economic growth. The central bank shut it down when they discovered it was working and their monopoly economic power was being threatened.
Anyone know of anything wrong with this system?
A far more efficient economic system is possible by Bart Klein Ikink http://www.opednews.com/articles/A-far-more-effici...
Posted 15 years ago # -
Anyone know of anything wrong with this system?
A far more efficient economic system is possible by Bart Klein Ikink http://www.opednews.com/articles/A-far-more-effici...
Interesting stuff, Bart Klein Ikink doesn't really understand communism, the most extreme example being him quoting some content from here:
Anti Communitarian League
http://nord.twu.net/acl/Which, on a quick scan, looks like seriously crazy disinfo.
I like these bits:
we should create a new form of money, which automatically arranges the economy in a sustainable way, needing less control of the government. Moreover, much less energy must be put into economic activities related to money
... you want to build a house and you have the choice between a house of € 100,000 with a yearly energy cost of € 5,000 or a house of € 200,000 with a yearly energy of € 2,000. When the interest rate is 10 percent, the cost for a cheap house with high energy consumption is as follows: € 10,000 plus interest € 5,000 energy is € 15,000 per year. The expensive house with low energy costs: € 20,000 interest plus € 2,000 energy is € 22,000 per year. If you do not have to pay interest, the expensive house with low energy cost will be cheaper.
But I like Keith Pope's comments on his stuff best:
I hardly like to suggest better doing without money altogether, as I have said it so often, and perhaps folks no longer see it or think about it - but maybe you should, just the same.
Sorry there aren't any 'isms' involved in the simple thought, but there you are, you can't have everything.
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Maybe your version is preferable if compared to the outright rape of the rest and of the planet, but I maintain that your version, too, would encourage activity for the sake of activity in order to get rid of the money the more quickly and therefore 'efficiently' and cheaply. What I am saying is that we can do infinitely better without the existence of any kind of money - period. - Or haven't you, as an economist, considered that.
Though perhaps we will need LETs of exchange based on hours worked or something for an interim period, it's interesting that this stuff is being talked about, crazy times!!
Posted 15 years ago # -
perhaps we will need LETs or exchange based on hours worked or something for an interim period
I need to look into all this stuff...
Posted 15 years ago # -
Riverdale-on-the-Hudson, OCTOBER 15, 1902.
THE HON. THE SECRETARY OF THE TREASURY, WASHINGTON, D. C.:
Sir,--Prices for the customary kinds of winter fuel having reached an altitude which puts them out of the reach of literary persons in straitened circumstances, I desire to place with you the following order:
Forty-five tons best old dry government bonds, suitable for furnace, gold 7 per cents., 1864, preferred.
Twelve tons early greenbacks, range size, suitable for cooking.
Eight barrels seasoned 25 and 50 cent postal currency, vintage of 1866, eligible for kindlings.
Please deliver with all convenient despatch at my house in Riverdale at lowest rates for spot cash, and send bill to
Your obliged servant,
Mark Twain, Who will be very grateful, and will vote right.
Posted 15 years ago # -
Chrisc wrote:
"I need to look into all this stuff..."
Careful!
"Studying economics also seems to make you a nastier person. Psychological studies have shown that economics graduate students are more likely to 'free ride' -- shirk contributions to an experimental 'public goods' account in the pursuit of higher private returns -- than the general public. Economists also are less generous that other academics in charitable giving. Undergraduate economics majors are more likely to defect in the classic prisoner's dilemma game that are other majors. And on other tests, students grow less honest -- expressing less of a tendency, for example, to return found money -- after studying economics, but not studying a control subject like astronomy.
"This is no surprise, really. Mainstream economics is built entirely on a notion of self-interested individuals, rational self-maximisers who can order their wants and spend accordingly. There's little room for sentiment, uncertainty, selflessness, and social institutions. Whether this is an accurate picture of the average human is open to question, but there's no question that capitalism as a system and economics as a discipline both reward people who conform to the model." - Doug Henwood
Posted 15 years ago # -
Marx wrote:
If money is the bond binding me to human life, binding society to me, connecting me with nature and man, is not money the bond of all bonds? Can it not dissolve and bind all ties? Is it not, therefore, also the universal agent of separation? It is the coin that really separates as well as the real binding agent — the [. . .] chemical power of society.
Shakespeare stresses especially two properties of money:
It is the visible divinity — the transformation of all human and natural properties into their contraries, the universal confounding and distorting of things: impossibilities are soldered together by it.
It is the common whore, the common procurer of people and nations.
The distorting and confounding of all human and natural qualities, the fraternisation of impossibilities — the divine power of money — lies in its character as men’s estranged, alienating and self-disposing species-nature. Money is the alienated ability of mankind.
That which I am unable to do as a man, and of which therefore all my individual essential powers are incapable, I am able to do by means of money. Money thus turns each of these powers into something which in itself it is not — turns it, that is, into its contrary.
Posted 15 years ago # -
"Marcel Mauss: Give It Away"
David Graeber
Have you noticed how there aren't any new French intellectuals any more? There was a veritable flood in the late '70s and early '80s: Derrida, Foucault, Baudrillard, Kristeva, Lyotard, de Certeau ... but there has been almost no one since. Trendy academics and intellectual hipsters have been forced to endlessly recycle theories now 20 or 30 years old, or turn to countries like Italy or even Slovenia for dazzling meta-theory.
Pioneering French anthropologist Marcel Mauss studied "gift economies" like those of the Kwakiutl of British Columbia. His conclusions were startling.
There are a lot of reasons for this. One has to do with politics in France itself, where there has been a concerted effort on the part of media elites to replace real intellectuals with American-style empty-headed pundits. Still, they have not been completely successful. More important, French intellectual life has become much more politically engaged. In the U.S. press, there has been a near blackout on cultural news from France since the great strike movement of 1995, when France was the first nation to definitively reject the "American model" for the economy, and refused to begin dismantling its welfare state. In the American press, France immediately became the silly country, vainly trying to duck the tide of history.
Of course this in itself is hardly going to faze the sort of Americans who read Deleuze and Guattari. What American academics expect from France is an intellectual high, the ability to feel one is participating in wild, radical ideas — demonstrating the inherent violence within Western conceptions of truth or humanity, that sort of thing — but in ways that do not imply any program of political action; or, usually, any responsibility to act at all. It's easy to see how a class of people who are considered almost entirely irrelevant both by political elites and by 99 percent of the general population might feel this way. In other words, while the U.S. media represent France as silly, U.S. academics seek out those French thinkers who seem to fit the bill.
As a result, some of the most interesting scholars in France today you never hear about at all. One such is a group of intellectuals who go by the rather unwieldy name of Mouvement Anti-Utilitariste dans les Sciences Sociales, or MAUSS, and who have dedicated themselves to a systematic attack on the philosophical underpinnings of economic theory. The group take their inspiration from the great early-20th century French sociologist Marcel Mauss, whose most famous work, The Gift (1925), was perhaps the most magnificent refutation of the assumptions behind economic theory ever written. At a time when "the free market" is being rammed down everyone's throat as both a natural and inevitable product of human nature, Mauss' work — which demonstrated not only that most non-Western societies did not work on anything resembling market principles, but that neither do most modern Westerners — is more relevant than ever. While Francophile American scholars seem unable to come up with much of anything to say about the rise of global neoliberalism, the MAUSS group is attacking its very foundations.
A word of background. Marcel Mauss was born in 1872 to an Orthodox Jewish family in Vosges. His uncle, Émile Durkheim, is considered the founder of modern sociology. Durkheim surrounded himself with a circle of brilliant young acolytes, among whom Mauss was appointed to study religion. The circle, however, was shattered by World I; many died in the trenches, including Durkheim's son, and Durkheim himself died of grief shortly thereafter. Mauss was left to pick up the pieces.
By all accounts, though, Mauss was never taken completely seriously in his role of heir apparent; a man of extraordinary erudition (he knew at least a dozen languages, including Sanskrit, Maori and classical Arabic), he still, somehow, lacked the gravity expected of a grand professeur. A former amateur boxer, he was a burly man with a playful, rather silly manner, the sort of person always juggling a dozen brilliant ideas rather than building great philosophical systems. He spent his life working on at least five different books (on prayer, on nationalism, on the origins of money, etc.), none of which he ever finished. Still, he succeeded in training a new generation of sociologists and inventing French anthropology more or less single-handedly, as well as in publishing a series of extraordinarily innovative essays, just about each one of which has generated an entirely new body of social theory all by itself.
Mauss was also a revolutionary socialist. From his student days on he was a regular contributor to the left press, and remained most of his life an active member of the French cooperative movement. He founded and for many years helped run a consumer co-op in Paris; and was often sent on missions to make contact with the movement in other countries (for which purpose he spent time in Russia after the revolution). Mauss was not a Marxist, though. His socialism was more in the tradition of Robert Owen or Pierre-Joseph Proudhon: He considered Communists and Social Democrats to be equally misguided in believing that society could be transformed primarily through government action. Rather, the role of government, he felt, was to provide the legal framework for a socialism that had to be built from the ground up, by creating alternative institutions.
The Russian revolution thus left him profoundly ambivalent. While exhilarated by prospects of a genuine socialist experiment, he was outraged by the Bolsheviks' systematic use of terror, their suppression of democratic institutions, and most of all by their "cynical doctrine that the end justifies the means," which, Mauss concluded, was really just the amoral, rational calculus of the marketplace, slightly transposed.
Mauss' essay on "the gift" was, more than anything, his response to events in Russia — particularly Lenin's New Economic Policy of 1921, which abandoned earlier attempts to abolish commerce. If the market could not simply be legislated away, even in Russia, probably the least monetarized European society, then clearly, Mauss concluded, revolutionaries were going to have to start thinking a lot more seriously about what this "market" actually was, where it came from, and what a viable alternative to it might actually be like. It was time to bring the results of historical and ethnographic research to bear.
Mauss' conclusions were startling. First of all, almost everything that "economic science" had to say on the subject of economic history turned out to be entirely untrue. The universal assumption of free market enthusiasts, then as now, was that what essentially drives human beings is a desire to maximize their pleasures, comforts and material possessions (their "utility"), and that all significant human interactions can thus be analyzed in market terms. In the beginning, goes the official version, there was barter. People were forced to get what they wanted by directly trading one thing for another. Since this was inconvenient, they eventually invented money as a universal medium of exchange. The invention of further technologies of exchange (credit, banking, stock exchanges) was simply a logical extension.
The problem was, as Mauss was quick to note, there is no reason to believe a society based on barter has ever existed. Instead, what anthropologists were discovering were societies where economic life was based on utterly different principles, and most objects moved back and forth as gifts — and almost everything we would call "economic" behavior was based on a pretense of pure generosity and a refusal to calculate exactly who had given what to whom. Such "gift economies" could on occasion become highly competitive, but when they did it was in exactly the opposite way from our own: Instead of vying to see who could accumulate the most, the winners were the ones who managed to give the most away. In some notorious cases, such as the Kwakiutl of British Columbia, this could lead to dramatic contests of liberality, where ambitious chiefs would try to outdo one another by distributing thousands of silver bracelets, Hudson Bay blankets or Singer sewing machines, and even by destroying wealth — sinking famous heirlooms in the ocean, or setting huge piles of wealth on fire and daring their rivals to do the same.
All of this may seem very exotic. But as Mauss also asked: How alien is it, really? Is there not something odd about the very idea of gift-giving, even in our own society? Why is it that, when one receives a gift from a friend (a drink, a dinner invitation, a compliment), one feels somehow obliged to reciprocate in kind? Why is it that a recipient of generosity often somehow feels reduced if he or she cannot? Are these not examples of universal human feelings, which are somehow discounted in our own society — but in others were the very basis of the economic system? And is it not the existence of these very different impulses and moral standards, even in a capitalist system such as our own, that is the real basis for the appeal of alternative visions and socialist policies? Mauss certainly felt so.
In a lot of ways Mauss' analysis bore a marked resemblance to Marxist theories about alienation and reification being developed by figures like György Lukács around the same time. In gift economies, Mauss argued, exchanges do not have the impersonal qualities of the capitalist marketplace: In fact, even when objects of great value change hands, what really matters is the relations between the people; exchange is about creating friendships, or working out rivalries, or obligations, and only incidentally about moving around valuable goods. As a result everything becomes personally charged, even property: In gift economies, the most famous objects of wealth — heirloom necklaces, weapons, feather cloaks — always seem to develop personalities of their own.
In a market economy it's exactly the other way around. Transactions are seen simply as ways of getting one's hands on useful things; the personal qualities of buyer and seller should ideally be completely irrelevant. As a consequence everything, even people, start being treated as if they were things too. (Consider in this light the expression "goods and services.") The main difference with Marxism, however, is that while Marxists of his day still insisted on a bottom-line economic determinism, Mauss held that in past market-less societies — and by implication, in any truly humane future one — "the economy," in the sense of an autonomous domain of action concerned solely with the creation and distribution of wealth, and which proceeded by its own, impersonal logic, would not even exist.
Mauss was never entirely sure what his practical conclusions were. The Russian experience convinced him that buying and selling could not simply be eliminated in a modern society, at least "in the foreseeable future," but a market ethos could. Work could be co-operatized, effective social security guaranteed and, gradually, a new ethos created whereby the only possible excuse for accumulating wealth was the ability to give it all away. The result: a society whose highest values would be "the joy of giving in public, the delight in generous artistic expenditure, the pleasure of hospitality in the public or private feast."
Some of this may seem awfully naïve from today's perspective, but Mauss' core insights have, if anything, become even more relevant now than they were 75 years ago — now that economic "science" has become, effectively, the revealed religion of the modern age. So it seemed, anyway, to the founders of MAUSS.
The idea for MAUSS was born in 1980. The project is said to have emerged from a conversation over lunch between a French sociologist, Alain Caillé, and a Swiss anthropologist, Gérald Berthoud. They had just sat through several days of an interdisciplinary conference on the subject of gifts, and after reviewing the papers, they came to the shocked realization that it did not seem to have occurred to a single scholar in attendance that a significant motive for giving gifts might be, say, generosity, or genuine concern for another person's welfare. In fact, the scholars at the conference invariably assumed that "gifts" do not really exist: Scratch deep enough behind any human action, and you'll always discover some selfish, calculating strategy. Even more oddly, they assumed that this selfish strategy was always, necessarily, the real truth of the matter; that it was more real somehow than any other motive in which it might be entangled. It was as if to be scientific, to be "objective" meant to be completely cynical. Why?
Caillé ultimately came to blame Christianity. Ancient Rome still preserved something of the older ideal of aristocratic open-handedness: Roman magnates built public gardens and monuments, and vied to sponsor the most magnificent games. But Roman generosity was also quite obviously meant to wound: One favorite habit was scattering gold and jewels before the masses to watch them tussle in the mud to scoop them up. Early Christians, for obvious reasons, developed their notion of charity in direct reaction to such obnoxious practices. True charity was not based on any desire to establish superiority, or favor, or indeed any egoistic motive whatsoever. To the degree that the giver could be said to have gotten anything out of the deal, it wasn't a real gift.
But this in turn led to endless problems, since it was very difficult to conceive of a gift that did not benefit the giver in any way. Even an entirely selfless act would win one points with God. There began the habit of searching every act for the degree to which it could be said to mask some hidden selfishness, and then assuming that this selfishness is what's really important. One sees the same move reproduced so consistently in modern social theory. Economists and Christian theologians agree that if one takes pleasure in an act of generosity, it is somehow less generous. They just disagree on the moral implications. To counteract this very perverse logic, Mauss emphasized the "pleasure" and "joy" of giving: In traditional societies, there was not assumed to be any contradiction between what we would call self-interest (a phrase that, he noted, could not even be translated into most human languages) and concern for others; the whole point of the traditional gift is that it furthers both at the same time.
These, anyway, were the kind of issues that first engaged the small, interdisciplinary group of French and French-speaking scholars (Caillé, Berthoud, Ahmet Insel, Serge Latouche, Pauline Taieb) who were to become MAUSS. Actually, the group itself began as a journal, called Revue du MAUSS — a very small journal, printed sloppily on bad paper — whose authors conceived it as much as an in-joke as a venue for serious scholarship, the flagship journal for a vast international movement that did not then exist. Caillé wrote manifestos; Insel penned fantasies about great international anti-utilitarian conventions of the future. Articles on economics alternated with snatches from Russian novelists. But gradually, the movement did begin to materialize. By the mid-'90s, MAUSS had become an impressive network of scholars — ranging from sociologists and anthropologists to economists, historians and philosophers, from Europe, North Africa and the Middle East — whose ideas had become represented in three different journals and a prominent book series (all in French) backed up by annual conferences.
Since the strikes of 1995 and the election of a Socialist government, Mauss' own works have undergone a considerable revival in France, with the publication of a new biography and a collection of his political writings. At the same time, the MAUSS group themselves have become evermore explicitly political. In 1997, Caillé released a broadside called "30 Theses for a New Left," and the MAUSS group have begun dedicating their annual conferences to specific policy issues. Their answer to the endless calls for France to adopt the "American model" and dismantle its welfare state, for example, was to begin promulgating an economic idea originally proposed by American revolutionary Tom Paine: the guaranteed national income. The real way to reform welfare policy is not to begin stripping away social benefits, but to reframe the whole conception of what a state owes its citizens. Let us jettison welfare and unemployment programs, they said. But instead, let us create a system where every French citizen is guaranteed the same starting income (say, $20,000, supplied directly by the government) — and then the rest can be up to them.
It is hard to know exactly what to make of the Maussian left, particularly insofar as Mauss is being promoted now, in some quarters, as an alternative to Marx. It would be easy to write them off as simply super-charged social democrats, not really interested in the radical transformation of society. Caillé's "30 Theses," for example, agree with Mauss in conceding the inevitability of some kind of market - but still, like him, look forward to the abolition of capitalism, here defined as the pursuit of financial profit as an end in itself. On another level, though, the Maussian attack on the logic of the market is more profound, and more radical, than anything else now on the intellectual horizon. It is hard to escape the impression that this is precisely why American intellectuals, particularly those who believe themselves to be the most wild-eyed radicals, willing to deconstruct almost any concept except greed or selfishness, simply don't know what to make of the Maussians — why, in fact, their work has been almost completely ignored.
David Graeber is a professor of anthropology at Yale University.
Posted 15 years ago # -
There has been lots of interesting stuff on the Free software movement and the gift economy in the last decade, I wonder if the Mauss people understand the Free software movement.
For example:
The gift economy and free software
A "gift economy" is a social system in which status is given by how much one shares or gives to one's community, as opposed to an "exchange economy" where status is given to those who own or control the most stuff. In today's world we're used to the latter economic philosophy, as it has been closely affiliated with the capitalist system since at least the Industrial Revolution and the invention of the corporation. But the Industrial Age is over -- this is the Information Age now, and things are changing.
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There is no comparison between a gift economy and a socialist economy -- communism requires a forced redistribution of wealth and a decided lack of status among all people. The gift economy philosophy wants us to do better and achieve wealth through contribution, to create more things for the purpose of achieving status and benefitting our community and society in general.
Posted 15 years ago # -
fascinating thread.
Posting the below links again for max visibility; if anyone knows of any reason(s) why Silvio Gesell's system will or will not have the same effects (locally, nationally and globally) that it did in Worgi in 1933-4, and would not result in sensible, sustainable innovation, long-term investment and economic development lifting ALL Peoples out of poverty, please post. I forgot to mention the town had 1/3 unemployment before they tried it. I haven't seen the Money as Debt vid, but Ikink links to it.
A far more efficient economic system is possible by Bart Klein Ikink http://www.opednews.com/articles/A-far-more-effici...
Chrisc, thx for the timebank links, i'll be checking out that idea, sounds promising for getting around money, at least on a local scale. Unfortunately, the website of the one nearest me is down at the moment.
Money is a fantasy; it has no inherent value, only what we humans assign to it/agree upon. We can't breathe, eat, wear, live in, have sex with or get love from money, although most humans believe money can usually be exchanged for these things, or "acceptable" substitutes. If the needs and healthy desires of the human race can be more efficiently supplied with an alternative system, sure, let's implement it; but what is it? Legally abolishing money in favor of timebanks sounds like it would force a return to localism and severely curtail R&D in technology- from other comments you've posted, chrisc, i take it you believe that would be positive, and I don't disagree it would be an improvement over the cancerous and suicidal fake free market system controlled by non-meriting "elites" that we have now, but i think most people won't support this, whereas many might support laws abolishing usury (the charging of interest). If money will increase in value as a result and there will be full employment, i don't care if i can't earn 1-4% on my savings, which is being eaten alive by the Fed's inflationary policies, which include periodically bailing out their criminal crony capitalist "too pig to fail" buddies- especially if i can borrow money w/o interest.
The US Constitution authorizes Congress to COIN money; why did they outsource this power to the secretive, unaccountable and privately-owned Fed? Because it served the public interest? No, because these bankers wanted the power to control the money supply and restrict competition. They got the bill passed by their bought and paid for "public servants" while most of the Congress was gone for xmas, and fooled Wilson into signing it (it's what they "elected" him to do- he later shared his fears that he'd enslaved his nation).
The Federal Reserve Act should be overturned, and the Fed nationalized, at the least. I don't think the gold standard is better. I think it would make more sense to peg the value of money to a trend that's been consistent since the Big Bang; the Law of Accelerating Returns. http://en.wikipedia.org/wiki/Accelerating_returns I think it would behoove all humans to take stock of the nature of this Universe we live in, and plan and live accordingly. The Turing Test was almost passed this year, and by 2020, if info tech trends remain as consistent as they have for more than a half century, a personal computer will have as much processing power as a human brain, and Solar will be able to supply most of the world's energy needs by itself- and amazing gains are being made in wind, wave, tidal and geothermal.
Even if everything people could even imagine wanting was available for free, people would still "work", i.e. invest our time and energy in activities and projects of our liking. Artists, musicians, writers, scientists, inventors, etc. will continue to create, just for the love of it, and others will seek to consume what they produce, singing along and dancing in the streets. "Jobs" and "careers" can suck the life out of people, when paying bills or getting ahead is the only motivation- especially when your job/entire industry and 401K evaporates thanks to the decisions of an ignorant and morally corrupt "elite" class of people- but some are able to find meaning and satisfaction in the most menial tasks; knowing it's useful to others is enough for some people. For these people, it's a calling.
Posted 15 years ago # -
Legally abolishing money in favor of timebanks sounds like it would force a return to localism and severely curtail R&D in technology- from other comments you've posted, chrisc, i take it you believe that would be positive, and I don't disagree it would be an improvement over the cancerous and suicidal fake free market system controlled by non-meriting "elites" that we have now, but i think most people won't support this, whereas many might support laws abolishing usury (the charging of interest).
I never suggested "legally abolishing money"... this change has to come from the bottom up not the top down.
I'm no experts on Lets or time banks, it's just clear that something's gotta change!
Posted 15 years ago # -
nornnxx65 said:
The Federal Reserve Act should be overturned, and the Fed nationalized, at the least.
The FED should be abolished entirely.
chrisc said:
this change has to come from the bottom up not the top down.
Changes can happen at a local level, but in all cases there needs to be a regulating body to control the supply of money. Whether this is a City-wide body, a State-wide body, or a National body, there has to be a trusted entity to determine what serves as the medium of exchange. It's great to talk about LET systems, and to implement them on a local level. But they really work only within the service sector and on a very small scale. For any complex economy involving manufacturing goods and trade between different political groupings, there needs to be a currency, some kind of actual, physical representation of value; that is, money. The only just system I can think of is a simple fiat currency issued by the government (in proportion to the amount of new goods entering the economy, ideally based on sustainable forms of energy). Like any system, this involves trust. But what else can work?
The early colonies used a fiat currency called "colonial script," and this is what pissed off the international bankers, who retaliated by getting England (who was already under their control) to increases taxes on goods and punish the colonies in other ways, all of which resulted in the Revolutionary war. If we are going to make change on a City, State or National level (rather than a LET system that will only effect a very very small number of people), we need to print our own money (meaning the city government, for example), distribute it and declare it good for all city-wide transactions. This is a fiat currency, and it is simple. And it would work. If all cities did this, or if States did it, there would evolve exchange rates between the currencies and people living in Portland like me, for example, could use their Oregon script in New York by exchanging it at an exchange center when they got to New York. This could happen at national level too, if the people can actually take control back of the government. But in all cases it is going to take a complete collapse of the current system before it can happen.
Emanuel
Posted 15 years ago # -
E wrote:
"but i think most people won't support this."
"The evidence supports the arguments . . . that we do learn to participate by participating and that feelings of political efficacy are more likely to be developed in a participatory environment. Furthermore, the evidence indicates that experience of a participatory authority structure might also be effective in diminishing tendencies towards non-democratic attitudes in the individual."
Carole Pateman, Participation and Democratic Theory, p. 105]
Posted 15 years ago # -
Emmanuel- I have no objection to abolishing the Fed, as long as it's replaced by a monetary system that serves the public interest- isn't a publicly owned fiat money system essentially a "nationalized" Fed?
Chrisc- i'm no expert either, i'm looking for solutions to social problems; i agree, something's gotta change, the current system of Federal Reserve/Republocrat rule doesn't serve the interests of the majority, though voters overwhelmingly go for 1 of the 2 fake sides.
"But in all cases it is going to take a complete collapse of the current system before it can happen."
Worgi had not completely collapsed- but 1/3 unemployment means it had collapsed for most people, and very few were unaffected, let alone doing well. And eventually the economy recovered, even with a corrupt and mismanaged monetary system. Seems to me that a system that's fair, that acknowledges human beings as having inherent value, that gives a stake and responsibility, will produce greater wealth, even for the leisure/investor class. The elites fear giving up their power and control, though.
Durruti- can you put your last post in your own words? I'm not sure what you're getting at.
Posted 15 years ago # -
in all cases it is going to take a complete collapse of the current system before it can happen
Hehe, well I guess we might have to start moving quote fast then!
Posted 15 years ago # -
Something else to look into (I haven't looked into it):
Caught in the money trap? Break free by joining the Community Exchange System
With the impending implosion of the usury-based, global money system, now is the time to seek a new way of 'doing' money, one not based on debt and controlled by a global monetary elite who are destroying our planet.
Conventional money is created as debt by private financial institutions for their own profit-making purposes, not as a social service. This is the root cause of the economic, social and environmental problems that beset us. The amount of debt determines the quantity of money, which has nothing to do with the amount of money we need to live decent lives.
CES 'money' is created by its users so it can never be in short supply. So long as you can offer something of value you can have from the community goods and services of like value.
Posted 15 years ago #
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